We re-examine the Morris and Shin (2002) model, but assume that players hold proper priors. This sharply alters equilibrium behavior, and welfare, particularly when coordination dominates individual payoffs. Whereas under improper priors the social value of public information is smallest, and...

We characterize the Nash equilibria of a class of two-player contests with a non-convex strategy space under the usual concavity assumptions. The analysis sheds light on behavior in international conflicts. For instance, it may explain why some attempts to resolve international conflicts have...

This short paper extends the analysis of Morgan and Tumlinson (2018) to the setting of a small open economy. We show that in this economy featuring endogenous free entry of firms: (1) Both the number and production of firms is socially optimal. Furthermore production is efficient --- it...

Clearinghouse models of online pricing - such as Varian (1980), Rosenthal (1980), Narasimhan (1988), and Baye-Morgan (2001) - view a price comparison site as an "information clearing-house" where shoppers and loyals obtain price and product information to make online purchases. These models...

We conducted 80 auctions on eBay. Forty of these auctions were for various popular music CDs while the remaining 40 auctions were for video games for Microsoft's Xbox gaming console. The revenue equivalence theorem states that any auction form having the same effective reserve price yields the...

A standard "solution" offered to the deleterious effects of all-out price competition is for firms to engage in differentiation strategies. This solution, however, depends critically on the inability of rivals to imitate a successful differentiation strategy. With imitation, we show how "Red...

The Chinese government is vigorously promoting commercialization of renewable energy and bioproducts, given environmental issues plus food, energy, and national security concerns, according to Chinese industry experts at the August 2010 “China Bioenergy Workshop” and its related technical...

The market structure of platform competition is critically important to managers and policy makers. Network effects in these markets predict concentrated industry structures, whereas competitive effects and differentiation suggest the opposite. Standard theory offers little guidance — full...

Two laboratory experiments - one a statistical urn problem, the other a monetary policy experiment - were run to test the commonly-believed hypothesis that groups make decisions more slowly than individuals do. Surprisingly, this turns out not to be true there is no significant difference in...